June 27, 2017

Failure Can Teach Success

Success & Failure: Two sides, same coinThe Kauffman Foundation just published a study of 549 company founders of successful businesses in high-growth industries.

I zeroed in on this finding: “40 percent cited lessons learned from failures as extremely important – the second-highest “extremely important” rating.”

Lessons from forty years in bankruptcy court

After forty years of practicing law I can validate Kauffman’s findings. I sometimes carry on about the recklessness and fecklessness of small business owners, since my job is to help them navigate troubled waters, but I’m not all gruff criticism.

Something Elizabeth Warren once said often comes to mind as I meet with financially troubled clients, and in particular entrepreneurs: “Bankruptcy,” she says, “is about economic death and rebirth, a story of failure but survival, how people come back, how businesses come back. It’s an American story.”

At this time of year I get holiday cards from people I’ve helped over the years and invariably I receive one from someone who thought their life was over when they filed for bankruptcy, but who’s since gone on to a productive and happy life. Bankruptcy allows a fresh financial start for honest but hopelessly indebted entrepreneurs. These folks are driven go-getters who have generally succeeded in the past, and are likely to succeed again in the future once the emotional weight and time drain of collection activity stops.

I tell my clients, “Your most important asset can’t be taken away from you by creditors. It’s between your ears.”

Here’s to a better 2010.